[Congressional Record Volume 143, Number 107 (Friday, July 25, 1997)]
[Senate]
[Pages S8155-S8156]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS:
  S. 1070. A bill to provide for a regional education and workforce 
training system in the metropolitan Washington area, to improve the 
school facilities of the District of Columbia, and to fund such 
activities in part by an income tax on nonresident workers in the 
District of Columbia; to the Committee on Finance.


  The Metropolitan Washington Education and Workforce Training Act of 
                                  1997

  Mr. JEFFORDS. Mr. President, I am introducing legislation today, 
pursuant to many recent discussions about the rescue plan for the 
District of Columbia, that reaffirms my strong belief that education 
must be the keystone of that plan and that fair and ready funding is 
available with no cost to the Federal Government.
  Every Washington area citizen should keep a careful watch on what 
Congress is doing to rescue the Capital from its present plight. The 
chorus resounds, ``we must get people to move back into the Capital! 
Its future depends on it!'' But if we examine the present congressional 
and administration plans and overlay them onto the root causes for the 
plight, serious questions arise as to their effectiveness.
  Studies indicate that the two leading causes, by far, that cause 
people to leave the District and keep them from living in the city are 
poor schools and high incidents of crime. Let's examine the plans that 
Congress has before it.
  Only the Senate plan as currently outlined even mentions education 
and that is basically a symbolic gesture to help repair the crumbling 
school infrastructure. The administration does consider the crime 
problem, but only at the end game of taking over the prison system. The 
administration's plan has no mention of repairing the failing D.C. 
educational system; a system which is among the worst in the Nation.
  The central administrative problem of the District's school system is 
not money, it is management chaos. But money is a serious concern in 
the area of school infrastructure, and D.C. has one of the worst school 
infrastructures in the Nation. In fairness to General Becton, the new 
chief executive officer for the schools, he is trying valiantly to 
upgrade overall standards but too much of his time is spent dealing 
with emergency school infrastructure repairs. Again this September, 43 
schools will be threatened with closure at the outset of the academic 
year. Over $2 billion are needed just to fix building code violations.
  Crime in the District is directly related to the public school 
system. Some 40 percent of D.C. children drop out of school between 
grades 7 and 12. National studies show that about 80 percent of prison 
inmates are school drop-outs. A plan to help D.C. must have a strong 
component to improve education. As will be shown below, this need not 
carry a significant dollar cost to the Federal Treasury. In fact it 
will save millions.
  The President wants to be known as the Education President. Congress 
wants to be known as the Education Congress. Wouldn't the best 
demonstration of that intent be to start by improving the education 
system of the Nation's Capital?
  The present plans for enhancing a middle-class tax base in the 
District are based on business tax incentives. But if you are a middle-
class taxpayer with school-age children you currently have to factor in 
approximately $10,000 a year in private education fees to feel 
comfortable with the level of education and safety you are providing to 
your family--$10,000 a year, per child, is a huge barrier for most 
middle-class families.
  The plans currently being considered in Congress that exclude 
discussion of schools may well create jobs. But jobs for whom? Even the 
promoters of those plans recognize that those jobs would primarily go 
to non-residents of the District. Projections show that two out of 
three jobs will go to non-residents. This will leave the District with 
more infrastructure demands and less money to deal with them--the exact 
status of the problems at present.
  As stated in the recent Brookings Institution study on D.C. entitled 
``The Orphan Capital'' taxing metropolitan area residents where they 
live instead of where they work creates a revenue boon for Maryland and 
Virginia and a revenue disaster for the District. D.C. is the only city 
in a multi-State configuration in the country that has an income tax 
but is not able to tax its non-resident workers. This situation has 
also led D.C. to have the highest income tax rate on its residents in 
the area. That income tax rate is another barrier to the middle-class 
return to the city.
  The result is that $20 billion in wages leaves the District each year 
without being taxed, resulting in hundreds of millions of dollars 
flowing each year to the treasuries of Maryland and Virginia. Only 1 
percent of this amount goes in the other direction--from D.C. residents 
working in the suburbs back in to D.C. This is a huge inequity that no 
other major city suffers.
  The history of the tax inequity began in 1973 when D.C. was given 
home rule. An astute Virginia representative convinced Congress to 
prohibit the non-resident tax from being enacted. A brilliant move, 
perhaps justified at the time, but it is unjust now, particularly to 
the children of D.C. It is not unexpected that the Maryland and 
Virginia Senators object violently when changing this situation is 
suggested.

[[Page S8156]]

  However, a win-win proposal for all D.C. metropolitan residents is 
possible. It will create high-paying job opportunities for high-school 
graduates through improved skill training. It will provide the needed 
repairs to the D.C. school infrastructure. It will provide funds to 
improve schools and other area training institutions.
  A recent report issued by the Greater Washington Board of Trade 
indicates that there are approximately 50,000 high-paying jobs 
requiring information technology skills in the Washington metropolitan 
area. These jobs pay on average $40,000 a year. By filling these jobs 
the Board of Trade estimates an additional $3.5 billion annually would 
be injected into the economy of what we call `the golden crescent'--the 
Washington metropolitan region that stretches from Annapolis, Maryland 
to Winchester, Virginia.
  But actually, this labor market shortage is a national problem. There 
are an estimated 190,000 information technology jobs going begging in 
the Nation for lack of skilled workers. Congress is presently trying to 
pass legislation to revamp our workforce training laws. We have at this 
time a prime opportunity to solve the D.C. metropolitan problem and 
provide a national model to help correct the serious national skill 
training deficiencies. I am introducing legislation today to accomplish 
this ``win-win'' structure.
  If the Washington metropolitan area were to become a model for the 
rest of the country we could jump start the rest of the country in 
solving this serious national problem. And this could be done with no 
additional Federal cost. But, of course, there is a hitch.
  My plan would require a 3-percent non-resident income tax on D.C. 
commuter wages. But remember, it would cost the commuters nothing 
because of laws requiring mutual offsetting tax credits. There would be 
an offset against the State income taxes of Maryland and Virginia. This 
would allow the commuter dollars to stay within the metropolitan region 
instead of going to Richmond and Annapolis with the hope of it coming 
back.
  One percent of this new revenue would be used to repair the D.C. 
school infrastructure. Bonds could then be amortized for the $2 billion 
needed. The other two percent would fund a trust overseen by metro-area 
school and business leaders to provide funding for regional skill 
training.
  Benefits to the regional economy should more than offset any losses 
to the States. It is hard to argue against growing the local Maryland 
and Virginia metro-area economies by $3.5 billion a year. This and 
future gains would more than offset the 1 percent going solely to D.C.
  And finally, this bill results in hundreds of millions of dollars in 
savings to the Federal Government; hundreds of millions of dollars of 
help to the suburbs surrounding the capital; the repair of the D.C. 
school system and the overall improvement of the regional school 
system; and potential revenue gains to Maryland and Virginia. Most 
importantly, it would make the congressional and administration plans 
sensible instead of senseless. We must not miss this opportunity.
                                 ______